Six sources of income you might be missing out on

When people come to us for advice, we often find there are benefits they are entitled to but haven’t claimed.

Normally, this is because the client isn’t aware the benefit exists, or because they’ve had a change of circumstance which they haven’t reported.

Below are six benefits people often miss out on which could give your finances a handy boost during the cost of living crisis.

Marriage Allowance
You can claim Marriage Allowance if your income is below the Personal Allowance of £12,570 and your partner is a basic rate payer. Claiming Marriage Allowance means your partner pays less tax by increasing their Personal Allowance by up to £1,260.

This is done by lowering your allowance by the same amount. Essentially, you are transferring to your partner the Personal Tax Allowance you haven’t used yourself.

Marriage Allowance can be backdated to the start of the 2017/18 tax year, and can still be paid if you were eligible in those years but your partner has since died. In some cases, backdated payments of around £1,250 can be made.

You can apply for Marriage Allowance here:

Disabled Child Elements
Additional elements can be added to both Universal Credit and Child Tax Credit if a child you are responsible for gets DLA or PIP.

These elements can be added to your claim even if you do not get the standard child element because of the two-child limit. In other words, you can get the disabled child element for your third child, even if you do not get a child element for them.

For each child that gets either DLA or PIP, you should have an additional:

  • £132.89 per month added to your Universal Credit, or
  • Up to £68 per week added to your Child Tax Credit

If they get the highest rate of the care component for DLA, or the enhanced rate of the daily living component of PIP, they can also have a severely disabled child element added:

  • For Universal Credit: £414.88 per month instead of the Disabled Child Element
  • For Child Tax Credit: £27.50 per week on top of the Disabled Child Element

Both of these elements can be claimed by reporting a change of circumstance to HMRC for Tax Credits or the DWP for Universal Credit — either through your online journal or by calling the helpline.

UC Helpline: 0800 328 5644
Tax Credits: 0345 300 3900

You can also manage your Tax Credit claim online:

Severe Disability Premiums
There are a few different premiums (or additions) which can be added to legacy benefits such as Income Support, Housing Benefit, or Employment and Support Allowance. There are also additions which can be added to Pension Credit.

The one that gets missed the most though is the Severe Disability Premium (SDP).

SDPs are paid to people who claim a disability benefit such as:

  • PIP with the daily living component
  • DLA with the middle or high rate of the care component
  • Attendance Allowance

To be eligible you must live alone and nobody must be claiming Carers Allowance for looking after you. You are still classed as living alone if you share your house with someone else but they aren’t part of your household — housemates and lodgers, for example.

If you think the SDP is missing from your claim, call the office that pays your benefit to check. If you’re not sure, Citizens Advice can help you figure out your entitlement. Our number is at the bottom of the page.

Contributions-based benefits
This is less common but we often hear people have applied for Universal Credit and been told they have no eligibility because of their partner’s income or capital.

What they sometimes don’t realise is they can claim new-style Employment and Support Allowance or Job Seekers Allowance based on their National Insurance contributions instead.

If you have a full contributions record for the last two financial years, you should be eligible. JSA is paid while you look for work, while ESA is paid if you cannot work due to an illness or disability.

JSA can be paid for up to 6 months and ESA is limited to 12 months unless you are assessed as being in the Support Group. More details about these benefits can be found here:

Extra Help with Housing Costs
Another less common one, but clients sometimes miss out on extra help with housing costs, either through Housing Benefit or the Housing Element of Universal Credit, because they forget to report the birth of an additional child.

Families with two children sometimes fail to report a change of circumstances when they have a third child because they think the two child limit prevents them from claiming any more benefits.

However, a third child will often entitle you to an additional bedroom under the Local Housing Allowance rules, which can increase your Housing Benefit or Housing Element if you aren’t already getting the full amount of your rent covered.

Contact your council if you think this applies and you claim Housing Benefit, or report the change through your journal or by calling the UC helpline if you claim Universal Credit.

If you can’t get extra help this way, but your rent is higher than your Housing Benefit or Housing Element, you can ask your local council for a Discretionary Housing Payment. You can normally apply for these online at your local council’s website.

Pension Credit
If you (and your partner) are over Pension Age and your total income is less than:

  • £182.60 per week if you’re single, or
  • £278.70 per week (joint income) if you have a partner

Pension Credit will top your income up to these amounts. These amounts are higher if you’re disabled and live alone, look after children, or are a carer.

Pension Credit can also passport you to additional benefits, such as a free TV licence if you’re over 75, as well as free dental care, prescriptions, the Warm Home Discount and other schemes. So, it can be worthwhile applying even if the Pension Credit you are entitled to is only a small amount.

If you’re partner is under State Pension age, you might be able to claim Universal Credit instead.

Further Help
If you think there’s a benefit you’re entitled to — or you’re not sure — call Citizens Advice and we can check your eligibility.

Our Adviceline number is 0800 144 8848

If you claim Tax Credits, want to claim Marriage Allowance, or want more information about the National Insurance requirements for contributions-based benefits, you can book an appointment with our HMRC team.

Email hmrc@pendle.cabnet.org.uk to request an appointment.

Disclaimer: This information was correct at the time of publishing on 20 June 2022 and is provided as a guide only. It is not a recommendation to take a specific action and we suggest you speak to an adviser if you have any doubt about how this information applies to you.

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